2014 Dividends Profiled.

One of my favourite tasks in a year is to take a look at the dividends coming in and how (hopefully), they show an increase over previous years.

Straight off the yield for 2014 v. the 31 Dec 13 portfolio valuation was 3.84%.
A little down on the 2013 yield of 3.9% perhaps but further investigation shows that there was a 30.08% overall increase in portfolio valuation (December 2013: Portfolio Update.), so thats 3.84% against a 30.08% higher portfolio valuation, which in turn suggests a significant increase in yield?

Month by month the pattern runs similar to previous years, which you would expect without a significant turnover in stocks held.
The one anomaly from previous years being March which has jumped to being the best month, or has it?

Further inspection reveals the cause of the jump to be the Vodafone special dividend received as part of the distribution from the sale of Verizon Wireless.

It also warns me that April is one of my worst months for dividends with just a small token from General Electric expected, unless it falls into May of course.


Taking the cumulative profile and matching it to previous years gives the following pleasing picture, where  I have used the 2011 actual yield as the baseline, 100%, so each subsequent year would illustrate an increase (thankfully no decrease), over this baseline.
Because it presents an exceptional item (and an exceptional jump!), I have also shown the Vodafone special dividend (just the special not the normal interim/final), as a separate step on top of the 2014 data so we can see the comparable increase with and without this exceptional item.
Even without it, the 2014 actual £ yield comes in at almost double that of 2011!
Not bad in 4 years!

Again the month by month view shows an overall increase, although there are more fluctuations which illustrate a change in stocks held and/or the dreaded dividend cuts.
There are also some occasional movements if dividend dates are at month end/starts, then, in later years, subsequently fall into earlier or later months.

Anyway, looking ahead, I am expecting further increases in 2015, even including the Vodafone special in last years total.

More an activity of touching base to keep perspective but I might extend it to keeping track of ex. dividend dates and upcoming payments (as I sometimes do over short timescales), as a means of seeing the hidden value in my portfolio, dividends entitled but not yet received!


Related Posts:
- December 2013: Portfolio Update.
- 2013 Dividends profiled.
- First dividends of 2013 (and 2012 dividends in profile).
- My first dividend of 2012 (and 2011 dividends in profile).

Buffett: Clarity and wisdom articulated.

Lots of easy to understand wisdom and common sense in these extracts: www.marketwatch.com: 50 best things Warren Buffett told investors over past 50 years
In particular, slide 10 captures much of my thinking and suspicion around the short term goals of the industry surrounding investment.

Article links:
- www.marketwatch.com: 50 best things Warren Buffett told investors over past 50 years

Interesting end to the week!

Interesting week for my portfolio with a number of mixed news items but enough positives serving to propel it to new all time highs.

Index @ 2333.34, +5.37% in the month to date, +11.63% YTD, +133.33% since 1 Jan 10
FTSE100 @ 7070.70, +4.39% in the month to date, +7.69% YTD, +30.63% since 1 Jan 10

On the downside:
- news that IG clients were unable to use the company's online trading platform for several hrs on Tuesday
- William Hill lost ground as profits took a hit from a bad weekly hit on football results in January, and a new regimen of taxes.
- Barratt Developments, BG Group, and Rolls-Royce all trading ex dividend.

On the seeming upside:
- At Rolls-Royce non-executive Warren East was announced as the next CEO inline to replace the current CEO John Rishton who announced plans to retire in July after just four years in charge.
- BAE announcing plans to consider the disposal of its US based manpower and services business
- Apple began shipment of its first Apple watches following a suggested 957,000 pre-orders on April 10, with Q2 earnings due to be reported after Monday's close
- Microsoft reported a 5%  increase in Q3 revenues ahead of analysts estimates.

Elsewhere:
- BG Group remains up after recent news of Royal Dutch Shell's intent to buy
- GE has retreated from recent highs resulting from news that it intends to offload its troubled finance arm
- at $1.52, the dollar has retreated from recent highs of $1.46 to the pound

And all this against the impending backdrop of negativity created by, oil prices, slowing Chinese growth, Greece's flirtation with debt default and the upcoming UK General Election bringing its own uncertainty around European membership, and regulatory and/or policy interference to various sectors of the markets such as energy, housebuilding, and banking amongst others.

Given the last time Labour entered Government resulted in the smash and grab of the pensions tax credit, windfall taxes, and regulations on insurance liquidity which possibly led to an extended stock market correction as such as Standard Life sold assets at the bottom of the market and bought gilts at the top of their market (liquidity constrained by a lack of new Govt issues). 
And despite its long term strategy being to wait on the recovery of its assets (pre fire sale), Standard Life also eventually found itself succumbing to privatisation as it sought to shore up its finances.

The manner of the Labour Government's departure also seems to have been forgotten along with the roles played by many of the current shadow cabinet, and it would seem a travesty to gift these fallen ministers another chance at furthering a political career/personal gain for the sake of mind games over austerity measures.
The current deliberation over the post election possibility that Lloyds could once again be fully privatised should serve as a further reminder of the last government's intent to mislead with its shotgun marriage of HBOS to Lloyds.

I'm digressing slightly but the point remains that despite these concerns the FTSE100 has finally broken new all time highs to break the 7000 mark which it has failed to do in both the run up to the tech bubble (Dec. 1999: 6930), and the run up to the credit crunch (Oct 2007: 6751).
Does this bode well for new highs to come, or a post election, or some other global event led crash?

Only time will tell.

March 2015: Portfolio Update.

Nothing too much worth writing about in March, my portfolio having fallen by -0.92% with general election, Greece, economic growth concerns, and oil price and other commodity price falls. 

Specific to BAT and Imperial Tobacco is ongoing concern that the proposed merger between US peers Reynolds and Lorillard might be under threat (www.express.co.uk: MARKET REPORT: Shares fall in British American and Imperial Tobacco).

So down 0.92%, v. the FTSE 100's -2.5%.

Dividends were received from Microsoft, SSE, and BP. The latter payout benefitting from an increased holding after my top ups late last year.

			Forecast	1 month	YTD	51 mth
	Price	% holding	Div. yield	% gain	% gain	% gain
R-R	953.00p	24.07%	2.50%	0.42%	9.54%	45.17%
Aviva	540.00p	13.64%	3.84%	0.19%	11.46%	49.26%
National Grid	865.00p	13.27%	5.17%	-2.48%	-5.78%	56.42%
BP	437.00p	9.49%	5.92%	-2.46%	6.33%	3.27%
Apple **	$124.43	9.15%	1.36%	0.84%	18.49%	130.48%
IG Group	709.00p	4.45%	4.47%	-3.01%	-1.39%	48.57%
Imperial Tobacco	2963.00p	2.90%	4.82%	-7.20%	4.48%	31.16%
William Hill	371.00p	2.95%	3.47%	-1.85%	2.34%	101.44%
BAT	3488.00p	2.31%	4.38%	-7.77%	-0.34%	3.99%
Vodafone	220.00p	2.10%	5.35%	-1.79%	-1.19%	-12.80%
Microsoft **	$40.66	1.97%	4.39%	-3.46%	-7.99%	53.17%
Banco Santander	504.00p	2.05%	2.67%	6.11%	-7.44%	-7.64%
General Electric **	$24.81	1.90%	3.16%	-0.62%	3.20%	71.07%
BAE Systems	524.00p	1.82%	3.99%	-1.69%	11.02%	58.79%
Barrat Dev.	529.00p	1.64%	4.28%	2.52%	12.31%	47.98%
SSE	1498.00p	1.44%	6.14%	-4.77%	-7.64%	22.29%
Verizon **	3279.52p	1.50%	3.85%	2.34%	9.27%	18.16%
Centrica	253.00p	1.11%	5.59%	3.69%	-9.32%	-23.70%
BG Group	829.00p	0.84%	2.37%	-13.47%	-4.16%	-36.03%
Cash		1.41%	0.00%
		100.00%	3.72%
				1 month	YTD	51 mth
Virtual Portfolio gain (incl. Dividends)
- 3 month gain  2235.05 -	2214.53			-0.92%
- YTD gain        1644.62 -	2214.53				5.95%
- 51 month gain 1264.20 -	2214.53					75.17%
- 63 month gain 1000.00 -	2214.53					121.45%
FTSE gain (excl. Dividends)
- 3 month gain   6946.66 -	6773.04			-2.50%
- YTD gain        5897.81 -	6773.04				3.15%
- 51 month gain 5971.01 -	6773.04					13.43%
- 63 month gain 5412.88 -	6773.04					25.13%
Transactions:
16/03/2015	Div	Microsoft @ 17.6p per share (*)
20/03/2015	Div	Scottish & Southern @ 26.6p per share
27/03/2015	Div	BP @ 6.67p per share
Notes:
*     US Dividends are adjusted for exchange rate and 15% withholding tax
**   Sterling : Dollar exchange rate = £1: $1.48284 as at 31/03/15
***  Banco Dividends are adjusted for exchange rate and 21% withholding tax
**** Sterling : Euro exchange rate = £1: $1.38102 as at 31/03/15

Chart wise the recent uptrend in 2015 has been broken but it remains above last years channel of consolidation (no returns!).

Click to enlarge, close to return.

So with the General Election looming, there appears to be some volatility ahead, particularly given concerns that there will be no clear majority, and/or Labour could return to govern hand in hand with the SNP.
Tough given that neither appear to have a recent track record with the UK's best interests at heart, more political ambitions fuelled by self interest.

Time will tell who will win out along with the realisation of currently perceived threats to various sectors of business: energy, construction, oil, and banking.

Good luck.

Related articles:
- www.express.co.uk: MARKET REPORT: Shares fall in British American and Imperial Tobacco

Previous Posts:
- February 2015: Portfolio Update.
- January 2015: Portfolio Update.
- December 2014: Portfolio Update.

BG Group shelling out?

BG Group @ 1250.5p, +340.1p (+37.36%)
RDS "B" @ 2091.5p, - 117.00p (-5.30%)

Hmm, mixed feelings on this one which has been a long, long time coming, and hats off to RDS as it looks to be at a better price (advantage RDS), than might have been some years ago when the move was first touted.
BG Groups assets seem to be pretty much the same and the original submission put forward the view that this would help boost RDS poor performance in replacing assets (shortly after their accounting scandal I think).
It was also thought at the time that this might create an auction for BG, so we will have to see.

Disappointing for me to see the price vs. what the previous buy out might have been at (if it had happened), the price that the shares have been, and the failure of management to capitalise and realise the potential of the assets it had "explored" and found".

As it is, reading the news this morning, and seeing the jump in the price, did give me a sense of relief at this long running disappointment, until that is, I realised the measly reward that that actually gives me.

Its an investment I have held for a long time now in the hope that either it would capitalise on its investment or be acquired for a more deserving premium.
Its also fair to say that it is an investment that pre-dates much of my portfolio and never quite sat right but whilst the story held, and management appeared to be moving in the right direction, it seemed justified.
However, the slippage in management credibility, and the collapse in the oil price (albeit one that seems can only be temporary), the price of BG has collapsed making it the disappointment that it currently is.

The roll-over of management only adds to that disappointment and, even with the new CEO (leaving after the deal completes!), questions capability that it should potentially reach this point.

Strange that the price has not risen to the offer price though. 1250p v. 1350p, following a move down in the share price of RDS affecting the share part of the offer?
The offer being £3.83 + 0.4454 RDS B shares (UK)

So 1250 - 383 = 867p the BG valuation of a 0.4455 share in RDS?
2091.5p x 0.4454 = 931.55p?

So the difference between 931.55p and 867p, 64.55p, could actually be a premium for BG shareholders, as they could be paying 867p, for 931.55p worth of RDS?

Or is that doubt or is there an opportunity to pick up £1 per share with an additional purchase, the difference between today's 1250p and the 1350p?
Or is the deal now just worth 1317p (1250p + 67p), because of the fall in RDS, and will it go up again?

Time will tell of course but I might just need to take a look at RDS and possibly pick up a few more BG?
Either way, RDS offers a more attractive yield whilst still offering a potential recovery in the oil price.
My holding in BG Group is smaller and being halved, a holding in RDS would be even smaller, so I need to consider the opportunity to gain an increased position in RDS, but knowing there is still risk that the deal might fall through?

Related Article:
- http://sharecast.com: BG Group shares rocket on recommended £47bn takeover offer from Shell
- http://www.theguardian.com: Shell confirms agreed £47bn bid for UK gas producer BG Group
- shell.com: Analyst presentation
-http://www.telegraph.co.uk: Shell agrees deal to buy energy rival BG Group for £47bn
- http://www.digitallook.com: ROYAL DUTCH SHELL PLC - Recommended Cash & Share Offer for BG Group by Shell PLC